Question from Scott: How do I help take the family business to the “next level” without insulting someone who has spent their whole life getting it to this level?

Sandra Harvey, a partner at Murphy Business Ottawa: The first thing is to start early with the discussion. This is very difficult in a family environment when there is a transfer of leadership and management. Often the senior member remains involved as a shareholder or in an advisory role, or at minimum at the Sunday dinner table. It is important to be sensitive and aware of the predecessor’s contributions, values and skills. Here are some tips:

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Communicate: Make sure senior members understand how much you value their contribution, experience and knowledge. They have been your teacher, mentor, coach and leader. Talk to them about your ideas but you may wish to do so slowly. Give them time to adjust out of their function as leader and find their new role. You may need just as much time to find your feet, and your staff may need some time to adjust to new leadership.

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Connect: Most people just want to feel that they are valued and their contribution is recognized, respected and appreciated. Whenever possible, link your changes to the foundation they have laid for you.

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Engage: If they are still involved in the operations of the company, ask them to assist with the changes. This may take come convincing but focus again on something that is a natural progression for them. Or as an alternative, they could fulfill a vital role that does not require a lot of change, but is very important for the core operations of the company. This comes back to the valued principle.

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Support: Find support outside your family. Organizations like CAFÉ (Canadian Association of Family Enterprise) are excellent support systems and the members provide a wealth of information. We learn from each other, just as you have from your family. In particular, CAFÉ’s Personal Advisory Groups (PAG) is an ideal format to be able to confidentially share your challenges and successes while gaining valuable input and support from your peers.

Brent Banda, president of Banda Marketing Group Inc.: Ask the exiting family member for assistance in developing a business plan to drive long-term growth. If both generations collaborate in this planning process, both will feel ownership to the direction of the plan and genuinely view this next phase as a natural step in the historical growth of the business.

The process of crafting this plan has considerable value for the organization. First, this document helps with transition and functions as a bridge between generations. Second, the collaborative effort will result in practical and realistic plans for future growth.

Both people must be flexible to accommodate the other’s point of view. For example, a family member that is exiting the business may prefer to preserve capital while the younger generation may wish to risk ‘the war chest’ to aggressively pursue growth. In this case, it may make sense to take a moderate approach to growth that reduces risk. A market penetration growth strategy (expanding market share in your current lines of business) is far less risky than expanding through diversification (entering a new line of business you are currently unfamiliar with).

Murray Gottheil, a partner at the law firm of Pallett Valo LLP: You start by improving communications with that person (who I will assume is the founder) so that the question is no longer relevant. One of the difficulties in family businesses is that the emotional relationships that start at the kitchen table often carry on to the boardroom table. Fathers and mothers speak to their adult children in a way that they would never speak to non-family employees, and sons and daughters say things to their bosses that no non-family employee would ever say to his or her boss. On the other hand, children sometimes cannot present to their parents the hard truths that a CEO might want a key employee to put forward.

There are professional advisers with backgrounds in psychology, social work and family business, who specialize in helping family members overcome these difficulties and learn how to communicate with each other in a family business. I suggest that the first step is to speak to one of these professionals and see if you can clear away the family baggage that may otherwise prevent you from having the necessary conversations with the founder in a safe and respectful way.

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